The automotive industry is a truly global industry. Major automotive manufacturing regions include the North American Free Trade Area (NAFTA), western Europe, Japan, Asia-Pacific, eastern Europe, South America and South Africa (AIEC 2014:7). The South African automotive industry is aligned to the global automotive industry and is, therefore, part of the global supply chains. The automotive industry in South Africa ‘is concentrated in three of the country's nine provinces, namely Gauteng, the Eastern Cape and KwaZulu-Natal, and in close proximity to its suppliers’ (AIEC 2014:9; Tolmay 2012:16). However, some automotive industry development is also taking place in the Western Cape and North West provinces (Tolmay 2012:16).

The automotive industry is the largest manufacturing sector in South Africa (AIEC 2014:4; Lamprecht, Rudansky-Kloppers & Strydom 2011). The South African manufacturing output accounts for 15% of the country's gross domestic product (GDP) and the automotive industry accounts for about 30% of manufacturing output (AIEC 2014:6). Exports of automotive components and vehicles contribute substantially to the South African trade balance. For example in 2013 the South African automotive industry exported 276 378 completely built-up vehicles to 87 destinations (AIEC 2014:46). Passenger car exports, as a percentage of passenger car production, totalled 57.3% (Table 1) and light commercial vehicles (LCVs), as a percentage of LCV production, totalled 48.8% in 2013 (Table 1). As a result, the exports of the South African automotive industry impacted positively on the trade balance.

The automotive industry in South Africa is made up of complete supply chains with seven OEMs, namely BMW, Ford, Nissan, Volkswagen, General Motors, Toyota and Mercedes Benz, as the biggest and most powerful parties in the supply chain (AIEC 2014:5). The OEMs source modules from a network of first tier (Tier 1) suppliers, who in turn source smaller components from second tier (Tier 2) suppliers. The industry also incorporates aftermarket components which are defined as role players after a vehicle has left the factory floor, such as dealers, fuel stations, and panel beaters (Tolmay 2012:xvi). South Africa has approximately 4600 fuel-service stations and 1898 specialist repairers. In addition, the industry includes the following:

It was mentioned above that the South African automotive industry is part of the global supply chains. There is a general consensus in literature that globalisation brings about numerous challenges for supply chains and, thus, also for local automotive supply chains. These challenges include shorter life cycles of products, cost reduction pressures and more demanding, knowledgeable and sophisticated customers with rapidly changing buying patterns. (Ambe & Badenhorst-Weiss 2011:352; Tolmay 2012:57). In addition, the South African automotive industry, and especially the component suppliers, is faced with competition from low cost manufacturing countries (Barnes & Black 2013:18; Lamprecht et al. 2011:56). On top of this, customers are reducing their number of suppliers − a process called supplier rationalisation − to, amongst others, manage the supply chain more effectively (Ambe & Badenhorst-Weiss 2013:2).

There is also consensus in literature that the strategic success of supply chain management is based on the strengths of relationships in supply chains (Thomas & Skinner 2010:44). It is consequently crucial for automotive supply chain role players to optimise supply chain effectiveness in every sense and to ensure that value is added in every process through collaborative relationships.

In its bare essence a supply chain is a series of close relationships amongst multiple firms (Thomas & Skinner 2010:44). Supply chain management is defined by the Council of Supply Chain Management Professionals (CSCMP) as:

The planning and management of activities involved in sourcing and procurement, conversion, and al logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers and customers. (CSCMP 2015:n.p.)

Consequently, supply chain management encompasses the management of upstream and downstream suppliers with the aim of adding more value than the competition and of achieving a competitive advantage (Ambe & Badenhorst-Weiss 2013:8). Automotive supply chains revolve mainly around operational efficiency and supplier collaboration. The successful management of suppliers provides a competitive advantage in automotive supply chains and is depicted by strategic partnerships, collaborative buyer-supplier relationships, cooperative operations and product design, trust and the sharing of information as well as risk (Ambe 2014:50–51).

Increased global competition is forcing companies to add more value to their products or services, and one of the ways to achieve this is to form long term collaborative relationships between customers and suppliers (Saban & Luchs 2011:43). According to Wisner, Tan and Leong (2016:528) collaboration means ‘working together through information sharing with suppliers and customers on various activities’.

Not all relationships between suppliers and buyers in supply chains will be collaborative or of a partnership type, but will depend on the situation and the nature of the product or service. For standard, routine and bottleneck products and services the buyer-supplier relationship will be adversarial or arm's length, as the buyers use multiple sourcing techniques. When buyers and suppliers accept that they have mutual goals they are taking a step closer to collaboration. ‘The emergence of collaborative relationships among firms in the supply chain is the recognition of mutual dependence’ (Bowersox et al. 2012:352). When more critical, strategic products and services are required suppliers and buying organisations often need to work together from product development and process design through to routine deliveries. The relationship will determine the degree of interaction, information sharing and collaboration between buyers and suppliers. With collaborative relationships, particularly when these have developed to a full partnership (Swink et al. 2011:294–295), also called a strategic alliance (Bowersox et al. 2012:353; Wisner et al. 2016:119), the buyers and suppliers (partners) expect to create better solutions than they could create alone. Partners plan together and have full access to information, designs, schedules, cost data. ‘A distinguishing feature of such relationships is the expectation that the collaboration will be continuous’ (Bowersox et al. 2012:353). Often in this kind of relationship long term contracts formalise the relationship. ‘Partnerships foster long term loyalty and mutual respect, ultimately leading to many of the advantages of vertical integration’ (Swink et al. 2011:295).

There is ample evidence of collaborative, partnership type buyer-supplier relationships in automotive supply chains. Swink et al. (2011:295–295) mention examples at the Ford Motor Company in Brazil, as well as at Toyota and Honda. Wisner et al. (2016:78) refers to the strategic partnership between Jaguar Land Rover and a key supplier, Gobel and Partner. The South African automotive supply chain is also characterised by long term collaborative relationships between customers and suppliers (Ambe 2014:50).

Trust is critical for any partnership or alliance to work (Wisner et al. 2016:79). Trust is a multifaceted concept and mostly conceived as the rational response to trustworthy behaviour by others (Uslaner 2002:6). Trust was defined by various authors in similar ways to the Oxford Dictionary's definition, namely the ‘Firm belief in the reliability, truth, or ability of someone or something’. Akrout and Akrout (2011:4) noted three different dimensions in trust theory. Firstly, a one-dimensional conception entails the conceptualisation and definition of trust by authors such as Morgan and Hunt (1994:20–38) and Geykens and Steenkamp (1995:351–371). They attempted to define and model the complexity of trust, but settled for a more holistic approach. Secondly, the two-dimensional conception of trust refers to the motives and intentions of the two parties with relation to trust, such as the benefits that they can both gain. Thirdly, the third-dimension of trust relates to the ethical standards or honest outcomes as that both parties believe the other will honour an agreement (Akrout & Akrout 2011:4).

In collaborative buyer-supplier relationship the partners must trust each other – ‘no real collaboration can exist in supply chain relationships without meaningful trust’ (Bowersox et al. 2012:353). Thus, trust can enhance the value of collaborative relationships (Saban & Luchs 2011:42).

In addition to Akrout and Akrout’ s (2011:4) dimensions of trust, Bowersox et al. (2012:353–354) distinguish between reliability-based trust and character-based trust. Reliability-based trust refers to the willingness and ability of a supply chain partner to perform as expected and promised. Character-based trust (in line with Akrout & Akrout's second and third dimensions) is based in an organisation's culture and philosophy. It stems from the perceptions that supply chain parties (buyers and suppliers) have about their partners’ intentions to seek the best interest for everybody and consider the impact of their actions on other partners in the supply chain. ‘Trusting partners believe that each will protect the other's interest’ (Bowersox et al. 2012:354). Reliability-based trust is necessary for the formation of collaborative relationships in the supply chain, but this is not the only condition. To maintain the relationship over the long term it should be a character-based relationship.

A study specifically undertaken on the automotive industry by Sako (2006:267–294) and later confirmed by Saban and Luchs (2011:46), found that trust in the supply chain results in a higher degree of learning and continuous improvements coupled with the advantage of cost reduction. Gounaris (2005:17) stated that ‘The more the customer trusts the supplier, the higher the perceived value of the relationship’. In line with Gounaris (2005) various authors agree on the advantages of trust in supply chain collaborative relationships. These advantages include: competitive advantage, satisfaction, commitment, business retention, innovation, better supplier performance, sustainability, information and knowledge sharing, improved supply chain relationships, customer satisfaction and commitment, as depicted in Table 2.

Further to the numerous advantages, Drake and Schlachter (2008:851–864), and later Thomas and Skinner (2010:46), stated that trust mitigates risk. Trust can also reduce general production and operation costs (Ç erri 2012; Drake & Schlachter 2008; Thomas & Skinner 2010; Tolmay 2012), procurement costs (Saban & Luchs 2011) and transaction costs (Akrout & Akrout 2011; Ç erri 2012). As a result, trust plays a critical role in the supply chain.

It was further found that higher levels of trust in the automotive industry result in a trust centric approach with suppliers rather than a command and control approach (Saban & Luchs 2011:52). A command and control approach, usually applicable to a transactional collaboration, constantly monitors the performance of the supplier at a high cost with low value exchanges between the two parties. The customer can easily dissolve the partnership and find a new source. In contrast, the trust centric approach between customer and supplier shares a high degree of strategic collaboration through interaction, knowledge and innovation sharing, and the parties are willing to invest in each other by means of time and energy to secure successful long term exchange (Saban & Luchs 2011:52).

When the relational exchange complexity increases, it is essential to simultaneously increase the trust centric collaboration. Strategic collaboration is required when partners share physical and intellectual assets. This is achieved when parties share a trust relationship which is not defined by contracts but rather by personal contribution (Saban & Luchs 2011:51).

Trust develops over time and repeated interactions amongst organisations and ‘… goodwill develops over time between partners’ (Wisner et al. 2016:80). Trust is elusive, but it tends to grow when both the supplier and buyer benefit (Swink et al. 2011:295).

It seems that factors such as culture and the resistance to complete transparency are hindrances to a trusting relationship. Ambe (2014:48) notes that automotive manufacturers differ culturally from each other and this is also eminent in different supply chain strategies. One of the largest hurdles hindering collaboration is a lack of trust over complete information sharing between supply chain partners (Jacobs, Chase & Aquilano 2009:499).

With the current unstable economic environment, it is crucial for all automotive component stakeholders to capitalise on best practices in order to survive. Therefore, all avenues should be pursued to improve trust relationships in supply chains. Unfortunately, an empirical study by Fawcett, Magnan and Williams (2004) and later on by Drake and Schlachter (2008:852) stated that many supply chain relationships still lack significant trust between the parties involved.

It became clear from the literature that trust is one of the most important dimensions of or contributors to effective and efficient collaborative supply chain relationships. As indicated previously, this article reports on a study that had been conducted to determine if there is trust in collaborative relationships between first and second tier suppliers (component manufacturers) in the South African automotive supply chains. Consequently, ‘trust’ and ‘relationship value’ were included in the questionnaire in order to determine their existence within the automotive supply chain. As per theory, trust is identified as a strong predictor of relationship value which corresponds with the theory presented by Morgan and Hunt (1994) − but, is this also true in the South African automotive supply chain?